THE business and assets of iconic Knowsley chain Ethel Austin have been sold to its former owner, Elaine McPherson.

Life & Style Retail, a new company set up by Ms McPherson, has bought 90 stores almost eight weeks after she put the business into administration.

It is the second “rescue” she has launched at Ethel Austin in less than two years after she put it into administration in May 2008 before buying it back.

She blamed a lack of banking facilities for its collapse on February 8.

Manchester administrator MCR, which worked with Ms McPherson on the previous sale in 2008, announced the deal late yesterday afternoon.

Joint administrator Geoff Bouchier said: “This is positive news for the 1,183 employees who were facing an uncertain future.

“We are pleased with the result and believe this is a suitable outcome, especially considering the tough market and the lasting financial pressures from the recession.”

He said no buyer has been found for 41 stores set to close in two weeks

And he added that he hopes to announce a deal shortly for Ethel Austin’s sister business Au Naturale, a Glasgow-based homewares chain bought from administrators by Ms McPherson in May 2008.

Administrators declined to reveal how much Ms Mcpherson paid for the business, which is believed to owe creditors several million pounds.

Almost 2,300 staff at the Knowsley headquarters and in stores around the country lost their jobs as a result of the company’s failure.

Four hundred Knowsley warehouse staff were made redundant, but about 40 have been recalled as agency staff with Bury-based HC Recruitment.